Accrual accounting:
A)recognises expenses when they have been incurred (economic benefits used up), regardless of whether the cash has or hasn't been paid.
B)recognises expenses when they are possible.
C)recognises expenses when they are earned.
D)recognises expenses when the cash has been paid.

Question

Quizplus · Accepted Answer

Accrual accounting recognises expenses when they have been incurred (economic benefits used up), regardless of whether the cash has or hasn't been paid. This means that the expenses are recognised based on the matching principle, which aims to match expenses with revenues in the same accounting period. This provides a more accurate picture of the company's financial position and performance.

Accrual Accounting